8 July 2013

A wrong turn on energy


Published: July 8, 2013
Sudha Mahalingam

The Indian government’s decision to double natural gas prices from April 2014 ostensibly to incentivise domestic gas production may render nuclear power less uncompetitive, an outcome that is largely unappreciated, but perhaps not unintended. The steep hike in domestic gas price is bound to freeze, if not drive down the share of natural gas in India’s already skewed energy basket with its attendant implications for energy security. Disproportionately weighed down by coal, which now accounts for more than 85 per cent of actual power generation from all sources, India’s energy basket has little room for manoeuvre. While imported coal will certainly appear more viable now, its absorption will be hamstrung by bottlenecks in port and handling infrastructure. Certainly no new gas-based generation will come up and even existing Combined Cycle Gas Turbine (CCGT) plants are likely to remain stranded.

Nuclear energy

Since power abhors a vacuum (pun intended), nuclear power from imported reactors, hitherto lurking in the background might emerge from the shadows to stake its claim in India’s energy basket. After all, like our universe, the energy industry is also ruled by the laws of relativity! That should be good news for the United States, which, having pushed through the 123 Agreement in the teeth of opposition from its own domestic constituency, has been waiting in suspended animation to operationalise it for the benefit of its reactor manufacturers. No doubt, U.S. companies have to compete with worthy rivals like Areva of France for a slice of the Indian market, but at least the market may open up now.

The United Progressive Alliance government which considers the Indo-U.S. nuclear agreement its crowning glory, has been at great pains to fully operationalise it, ostensibly to enhance India’s energy security, but has not succeeded largely because of cost factors. Imported light water reactors are hugely expensive to build and necessitate continued reliance on increasingly expensive, imported, enriched uranium. All these translate to very high level power tariffs even with substantial latent and patent subsidies, a detail that has been drowned in the din over the safety and environmental aspects of nuclear power. That nuclear power from imported reactors would still be too steep for India and even a couple of imported reactors may set back our power sector by decades a la Enron, will be a problem for a future government to grapple with. For the moment, high gas prices would tend to persuade us that nuclear power from imported reactors is indeed the only way forward.

Pricing premise

As for gas pricing, the premise on which the guiding formula has been justified seems to be rather flimsy, a point that has already been made by Surya Sethi and others, but still bears repetition. First of all, an invidious distinction has been made between those recommendations that would be applied prospectively and those that would take effect during the currency of production sharing contracts already under implementation. Thus, tinkering with production sharing contract (PSC) terms to ensure that production costs are not unduly inflated by the contractor has been kept in abeyance to be applied to future PSCs while pricing decisions will apply to existing PSCs.

That Krishna-Godavari (KG) D-6 production costs have been gold-plated is a well-documented fact which has even drawn the especial attention of the Comptroller and Auditor General (CAG). The Rangarajan Committee report admits as much and concedes the need for putting in place a robust mechanism to check gold-plating of upstream costs. Yet, this key lacuna will remain unaddressed in the case of existing PSCs even as higher prices will bestow substantial and unwarranted benefits on the operators, as has already been pointed out by several eminent observers. In fact, there is little justification for so steep a hike in the price of gas from already discovered fields of Reliance Industries Limited (RIL) which were supposed to supply at least 80 million metric standard cubic meter per day (mmscmd) even at U.S. $4.20/mmbtu [million metric British thermal units], but produce less than a quarter of that quantity. Reliance even built a hugely expensive pipeline across the country to carry 80 mmscmd of its own production. This pipeline is now being subsidised by a few unfortunate users who consume the meagre volumes of gas it transports.

Exploration

The premise that higher prices will automatically and inevitably lead to higher exploration and production (E&P) and therefore, higher gas output, is not only flawed but even misleading. The Union Petroleum Minister prepares the ground, as it were, by claiming a few weeks ago that India is virtually floating on hydrocarbons. He makes out a case that it is only inadequate exploration that keeps our country dependent on imports. The preface to the Terms of Reference (ToR) to the Rangarajan Committee almost anticipates the recommendations: it waxes eloquent on the attractive prospects of the grossly under-explored sedimentary basins, and almost implies that only a well head price hike stands between the cornucopia of black gold and the investments needed to pour it out. The committee itself rises to the bait and uses convoluted logic to justify doubling of gas price, providing a fig leaf to the government to justify the hike.

NO NEED TO CONTINUE- The State-owned enterprises must be gradually privatized

Commentarao: S.L. Rao

India’s orientation to major government involvement in industrial development can be traced back to the committee with the then top industrialists, Purushottam Das Thakurdas, J.R.D. Tata, G.D. Birla, Ardeshir Dalal, Shri Ram, Kasturbhai Lalbhai, A.D. Shroff and John Mathai, formed in 1942. It proposed the ‘Bombay Plan’ for India’s economic development. The industrialists said, “no development... will be feasible except on the basis of a central directing authority”. This meant directing investment to desired areas.

The plan proposed doubling per capita income within 15 years. Industrial productivity had to grow by five times, and industrial planning had to be focused on the development of capital goods industries. The Centre was to invest heavily in starting industrial enterprises. These were basic and key industries — transport, pharmaceuticals, armaments, aircraft, cement, steel, aluminum, machinery, power and the like. (State governments soon started their own.) Most of the funding would be raised by the government, especially from borrowings abroad. Private investment would be directed into desired directions through industrial licensing.

Professional management in India was not well developed at the time. The only trained cadre was the civil services that administered the country. Civil servants were drafted to set up and run these State-owned enterprises. A few non-bureaucrats were brought in — D.V. Kaput, V. Krishnamurthi, Prakash Tandon, Yogi Deveshwar and the like. But there were few such, and the bureaucracy developed remote control of the SOEs through rules, procedures and many approvals. Although over time, the enterprises developed their management cadre, the administration continued to exercise great control over them.

With liberalization from 1985 and the abolition of licensing from 1991, private investment entered sectors reserved for government enterprises. Public sector monopolies were broken. The SOEs faced competition. However, their inflexible mandates limited them to defined sectors. They could not diversify to improve profitability. The detailed controls by administrators in the government over the SOEs, on their expansion, diversification, technology imports and collaborations, royalties, building brand images through product quality, service, pricing and advertising, continued. These stunted managerial innovation and corporate growth. A culture of defensiveness, avoiding risk-taking and errors of judgment and losses, developed in the SOEs. The three C’s — the CBI, the CVC, the CAG — were deterrents to bold decision-making in the SOEs. The private sector is more tolerant of loss-making mistakes (provided they do not happen too often).

There are many examples of SOEs that fell behind as a result. Air India was prevented from replacing old airplanes for over 10 years while private competitors took over profitable routes. Then it was compelled to buy planes for which Air India had no plans for utilization. Bharat Heavy Electricals Limited failed to upgrade its product technologies, resulting in loss of much business, especially for more advanced equipment, to foreign producers (China is a major example). It has failed to deliver equipment in time. Expansion of power supply and equipment breakdowns among users was the result.

Coal India, the most profitable SOE, supplies low quality coal, and misses supply commitments. The result — damage to expensive turbines; heavy shortfalls in power generation and fertilizer production; imports at much higher costs; consequent higher costs to the economy and the consumer.

Defence enterprises were prevented from or made to postpone acquisition of technology. High imports of defence equipment benefited import agents and their local touts. The country, in spite of its acclaimed engineering and software skills, imports a major part of its defence requirements because of government restraints on indigenous production. Hindustan Machine Tools’ inability to keep pace with the modern electronic age made it a sick company. Bharat Electronics survived by supplying the non-government market and technology innovation. It was a rare exception.

National Thermal Power Corporation missed every plan target for new generation capacity mainly because it did not develop EPC (engineering, project, construction) capability, avoiding possible retribution if it lost out on a project. The NTPC had strong technical skills in power generation because of excellent selection and training schemes. The NTPC benefited from being government-owned, and almost a monopoly at the national level. Its owner gave it special tariff preferences and accelerated depreciation, which bolstered cash flows. Bharat Sanchar Nigam Limited and Mahanagar Telephone Nigam Limited declined in the face of aggressive private competition and lack of innovative leadership.

State government-owned SOEs are in worse shape. The best examples are the state electricity boards. They will lose Rs 100,000 crores this year. They allow theft of electricity, give it free to farmers, are headed by itinerant bureaucrats, and engineers hold managerial positions with little training.

Many SOEs are major drains on the productivity of the economy, and make frequent large calls on government funds. Central government investment in the SOEs is now Rs 729,228 crores. Capital employed (paid-up capital+reserves and surplus+long-term loans — mostly from the government) in 2011-12 was Rs 1,328,027 crores. Many SOEs are overstaffed, and labour productivity is low. In 2011-12, the 225 SOEs owned by the government made a net profit after tax of Rs 97,512 crores. They paid out dividends of Rs 42,627 crores, or 3.21 per cent on capital employed, and 43.71 per cent dividend payout. Interest payments were 4.9 per cent on long and short term borrowings, mainly from the government, much less than market rates. Loss making SOEs like Air India, Indian Telephone Industries Limited, BSNL, MTNL and others, lost Rs 27,602 crores. There are large fund infusions for them on the anvil. Plan outlay on SOEs in 2011-12 is estimated at Rs 190,794 crores. Market capitalization of 44 listed SOEs has been declining. Thus, the SOEs contribute little to government finances and make frequent financial demands.

What about the Right to Good Governance?

Monday, 08 July 2013

Just like Right to Education doesn't guarantee good academics and the Right to Food will perpetuate hunger and poverty, the proposed Right to Water is yet another empty electoral gimmick

Abraham Lincoln once said: “You can fool some of the people all of the time, and all of the people some of the time, but you cannot fool all of the people all of the time.” But our leaders believe that they can do so. The Government announces many schemes supposedly to alleviate poverty or provide welfare services but they are rarely implemented. Recently, the Union Government said that it would like to pass a law on the right to 25 litres of water every day for each citizen. But Right to Life and Liberty are already guaranteed in the Constitution, and includes Right to a Good Life.

The draft National Water Framework Bill, which provides the legal basis for this so-called ‘Right to Water’ says that: “The minimum quantity of potable water shall not be less than 25 litres per capita per day”. But in another segment, it also says that, “The quantity must be fixed by the appropriate Government”. The Bill also says that Governments should specify the “quality standards” of water supply for various uses like drinking, livestock, irrigation and industries among others.

New Delhi is the seat of the Union Government, and even here, water supply is not only dismal but grossly inadequate and largely contaminated. The day the Bill was sent to the States for their views, in Delhi, half-a-dozen people died and over 50 were hospitalised due to water-borne infection. In fact, in some Delhi colonies, the water and sewerage pipes run parallel, and leakage from one or both renders the water unfit for drinking.

Let us take a look at some of the other such ‘rights’ that the Union Government has legislated in recent years, such as the Right to Education. The Chief Minister of Goa called it an “absolutely foolish policy”. He added that a number of parametres in the policy, such as the ‘No Detention Clause’, were problematic. After the RTE, studying has become a farce as students are automatically promoted up to Class 9, irrespective of whether they have attained the desired skills and knowhow.

For 2013-2014, the Union Ministry of Human Resource Development has an education budget of Rs 65,869 crore. Of this, the Sarva Shiksha Abhiyan has been allocated Rs 27,258 crore for implementing the Right to Education Act. The previous budget for 2012-13 had an outlay of Rs 61,427 crore for education, with Rs 25,555 crore for Sarva Shiksha Abhiyan. The above are, however, not the only instances of how public funds are being squandered by the Government.

There are some schemes of the Government which are bottomless pits where any amount of money can be siphoned off. In October 2012, the Supreme Court posed a question on cleaning the Yamuna and other rivers. It asked what had been achieved after putting in so much money. “Where has all this money gone? We don’t see any improvement in the water of the river.” Yet, nearly Rs 12,000 crore has been spent in the last 18 years by the Union Government and the State Governments of Delhi, Haryana and Uttar Pradesh to clean up the river. There is no accountability on the part of those who make skewed policies or those who are responsible for implementing them.

Bureaucrats with connections to powerful politicians can get away with murder. For example, recently when the then Indian Deputy High Commissioner in London was posted to Switzerland as India’s Ambassador, the incumbent in Geneva — the daughter of a former President — refused to hand over charge. So the other official had to be posted elsewhere!

Good governance has been sacrificed at the altar of vote-banks, where it is common to sup with the devil. And the Government believes it can make up for it by distributing freebies — computers, tablets or mobiles or even food in the form of the food security Act.

The National Food Security Act will condemn India’s poor to perpetual poverty. It aims to distribute grain to two-thirds of India’s population at a 90 per cent subsidy, costing over Rs 1,62,000 crore. If you give anybody anything free of any cost, he will consider it his ‘right’ for all time to come and will demand even more.

Talking to the Talibans

Jul 08 2013

For India, the key will be to get away from a debate centred on a binary construct: for or against the Taliban

India is not our enemy, but a complication," argued a former deputy minister in the erstwhile Islamic Emirate of Afghanistan, as the Taliban-led government that forced its way into power in 1996 was known. Like many of his companions, the official in question remained in hiding following the American-led intervention in October 2001. He was allowed to return to Afghanistan, and now works as a "peace entrepreneur", a self-styled designation. A moderate by comparison, he argues that he advocates education for girls — as long as they don't share a classroom with boys — and employment schemes for women, as long as the latter are housed on a separate floor of a factory or an office. He explains why neither he nor what is today referred to as the Quetta Shura Taliban (QST), the old guard that rose to disrepute in the 1990s led by Mullah Omar, were inherently "anti-Indian". They "had" to be seen to be anti-Indian by their chief sponsors: the ISI in Pakistan.

Further, the former minister argues that in part, the Taliban has changed. The QST, he claims, "has learnt its lessons". Al-Qaeda did nothing for the Taliban. After all, he argues, its actions displaced the Taliban from power. To be politically engaged and connected with the future of Afghanistan, moderation and a degree of compromise is paramount. Such carefully chosen and well designed rhetoric can be understood to have been tailored to soothe the ears of his interviewers: a group of academics struggling with the contours of reconciliation.

The empirical evidence — including the barbarities thrust upon the Afghan population during the Taliban's time at the helm — does little for the interviewee's credibility. For India, the rationale underlying the deep and unwavering scepticism of any hope in a changing the Taliban is understandable. Few can forget those anxious days in the winter of 1999, when the Taliban allowed a hijacked Indian Airlines plane to land in Kandahar. The semantics between an "enemy" and a "complication" mattered little to a nation held at ransom. It is hardly surprising that the current American-led — but British and German supported — efforts to negotiate with the Taliban in Doha are neither attractive nor encouraging for Indian officials and experts.

However, can the Taliban and the ongoing endeavour to negotiate in Qatar simply be ignored or argued away as another West-backed try at something reckless? Certain markers deserve attention. First, the "Taliban" — in its various hues — remains an undefeated force. It's authority in large parts of southern and eastern Afghanistan is a reality. Second, while there is nothing inevitable about an element of the larger Taliban movement reconciling to accept political imperatives over those of the gun, there is some evidence to suggest that a slim minority are more convinced by the virtues of dialogue than continuing bloodshed. Third, a large part of the movement — or the likes of the so-called Haqqani group — cannot and should not be reconciled. This is an organisation largely supported by the ISI, as treacherous to Indian interests as the Lashkar-e-Taiba.

If these observations are to be taken at face value, and if the presumed reality of the continuing existence of the Taliban is accepted, the following measures might be kept in mind. For India, the key would be to get away from a debate largely centred on a binary construct: for or against the "Taliban".

First, it is essential to at least consider the arguments highlighted by the former minister quoted above, many of whose views tally with one section of those currently represented in Doha. Whether out of necessity or virtue, there is little doubt that those within the political committee of the existing QST desire a political role in the future of Afghanistan. Indeed, at least three former senior ministers and dignitaries once close to Mullah Omar have surrendered or volunteered — the difference is hard to disentangle — to accepting and advocating what might be called a compromised version of their social conservatism.

It is not for nothing that these actors have pushed for local ceasefires, persuaded their more militant partners to stop attacks on teachers and girls' schools, and openly voiced their support for women's colleges and an Afghan constitution acceptable to all ethnicities. Again, whilst not convincing, surely there is an argument to be made about engaging these voices. In some small way, they are likely to be a force of reality in the future of Afghanistan, an Afghanistan in which India's role and footprint will outlast those of other nations haphazardly scuttling out of their respective military and political centres of power.

Second, there is merit in branding different parts of the group rather than treating the Taliban as a single whole. In this respect, the Indian government needs to do more to push back the American-led design to engage the Haqqanis. It is unfathomable why the Haqqanis should be represented in Doha. If true, from an Indian point of view, there is no merit in the argument whatsoever. These are, of course, matters that were presumably discussed with US Secretary of State John Kerry, but they need urgent public articulation. Dealing with the Haqqanis is a short-sighted and potentially dangerous advance thought up in Washington and London. For its part, India needs to step up the pressure. The failure to do so may well lead to a future Afghanistan that will house actors a lot more convinced about treating India as an enemy than those in the 1990s.

The writer teaches at the Department of War Studies at King's College, London

Myanmar must end blame game and accept its Muslims

Nehginpao Kipgen
Jul 7, 2013 

http://www.thenational.ae/thenationalconversation/comment/myanmar-must-end-blame-game-and-accept-its-muslims

Time magazine portrayed Wirathu, a prominent Myanmar Buddhist monk, as "The Face of Buddhist Terror" on the cover of its July 1 international edition.

The story has triggered mixed responses and has sparked a campaign to denounce the magazine for linking Buddhism with terror.

The article itself became so controversial and sensitive that the Myanmar government banned the magazine. Ye Htut, spokesperson for President Thein Sein, announced that Time "would not be sold and distributed to prevent the recurrence of racial and religious conflict".

The magazine defended its story and said: "Time's international cover story … shows the presence in Myanmar of an extremist movement that associates itself with Buddhism. Time is pleased by the debate and discussion this important piece has raised."

While the Myanmar government condemned the article, Wirathu said the magazine is not against Buddhism but him. He accuses Muslim extremists of attempting to strip him of his monkhood.

Wirathu's name has been associated with radical ideologies for some time now. Since 2001, he has warned that Muslims will take over Myanmar. He was jailed in 2003 for his radical sermons but released in 2012 as part of a general amnesty.

Wirathu has continued his anti-Muslim rhetoric since his release last year. He is part of the "969" nationalist movement of monks who warn about minority Muslims threatening racial purity and national security. The campaign encourages Buddhists not to do business with Muslims and to only support fellow Buddhist shops.

Wirathu also proposes an inter-religious marriage law that specifies that anyone who marries a Buddhist woman must convert to Buddhism. The draft, if it becomes a law, will also require any Buddhist woman seeking to marry a Muslim man to first obtain permission from her parents and local officials. Those who fail to comply could face up to 10 years in prison and have their property confiscated.

The government's position is that it will not take action against Wirathu for his alleged hate speeches towards the Muslim community for the reason that no complaint has been made by any individual or organisation to the Sangha Maha Nayaka, the committee responsible for reviewing the speeches and sermons of monks.

In the light of this evolving story, what needs to be done in the larger interests of the people?

First of all, it must be understood that Myanmar experienced religious-related violence in 2012 and earlier this year.

Made in Bangladesh




By Hauke Goos and Ralf Hoppe
07/05/2013 

Greed, Globalization and the Dhaka Tragedy

On April 24, a textile factory collapsed in Dhaka, Bangladesh, killing over 1,100. A government investigator has presented his results to SPIEGEL. They tell a harrowing story of a disaster caused by greed and the pressures of globalization.

On the morning of April 24, 2013, at about 8:45 a.m., the Rana Plaza, a nine-story building housing factories and offices, collapsed in the Bangladeshi capital Dhaka. More than 3,500 people were in the building at the time, and 1,129 died in the wreckage. Mainuddin Khandaker, a senior official at the Ministry of Home Affairs, began his investigation that evening.

Six weeks later, Khandaker is sitting in a carved wooden armchair in his living room. A soft-spoken man in his early 60s who wears gold-rimmed glasses, he lives in Dhaka's government district. It's been dark outside for a while, and a single fluorescent tube, surrounded by fluttering moths, is the only light in the room. Khandaker is balancing a bowl of dark berries on his knees.

In the last few years, he has investigated more than 40 cases of factories that either collapsed or burnt down. But none of those accidents approached the scale of Rana Plaza, the biggest industrial accident in the country's history. The 493-page report Khandaker wrote contains witness statements, photos and structural engineering calculations. It will probably remain under lock and key. An investigative report on the textile industry has never been published in Bangladesh, he says.

Khandaker goes into the next room and returns with a stack of paper, the summary. He eats a berry from the bowl and carefully spits the seed onto the saucer. "Time pressure, lots of money, a lack of scruples and greed -- everything came together on that day," he says.

Dhaka, Basti Madjipur, April 24, 5:30 a.m.

The day began early in Basti Madjipur, a neighborhood in Dhaka's northwestern district of Savar.

A "basti" is a sprawling collection of simple concrete houses with sheet and corrugated metal roofs, separated by labyrinthine paths, where half-naked children play between puddles and ponds. There are chicken sheds everywhere, and the neighborhood is also home to a drove of small pigs. About 100,000 people live there. Everyone works in the nearby textile factories, and at the time, many were employed at the Rana Plaza building.

Mohammed Badul and his wife Shali got up at 5:30 a.m. that morning. Badul worked in the packaging department of a company called Phantom Apparels Ltd., in the Rana Plaza. His wife was a seamstress in another factory.

They live in a 12-square-meter (130-square-foot) room with a concrete floor, together with their nine-year-old son Sabbir. They own a bed, a dresser and dishes, some clothing and a TV set. A faucet and a shower are outside.

Like most mornings, Shali cooked rice with a little oil and a small amount of vegetables to bring to work as lunch for her and her husband. They didn't eat breakfast. At about 7 a.m., they left on foot for their respective factories. Shali had given her husband his lunch in a tin can. The one-hour lunch break began at 1 p.m.

The normal shift usually lasted until 8 p.m., but workers were often kept later for overtime, until 10 p.m. Shali went shopping on the way home, arriving at the house by around 11 p.m. Her son was already sleeping.

Can Egypt Pull Together?

Published: July 6, 2013 

ANYONE who has followed Middle East politics knows that this is a region where extremists tend to go all the way and moderates tend to just go away.

But every once in a while — the 1993 Oslo peace negotiations, the 2006 Anbar uprising by Iraqi Sunnis against Al Qaeda, the 2005 Cedar Revolution in Lebanon against Syria and Hezbollah — the moderates actually rise up and take a stand. And when they do, America needs to be there to support them. It is the only hope for moving this region — so poisoned by sectarianism and weighed down by a past that always wants to bury the future — onto a more positive path. I’d put last week’s popular uprising/military coup against the Muslim Brotherhood-led Egyptian government — and it was a combination of both — in this category. 

I do not arrive at that conclusion easily. It would have been far more preferable if President Mohamed Morsi of the Muslim Brotherhood’s party had been voted out of office in three years. This would have forced the party to confront its own incompetence and popular repudiation. I wish the Egyptian army, which has its own interests, had not been involved. But perfect is not on the menu anymore in Egypt. In fact, even foodmay not be on the menu anymore for the poor. A large number of Egyptians felt that waiting three years could have pushed Egypt over the edge. The country is so short of foreign currency to pay for fuel imports that gas lines and electricity shortages are everywhere. It was clear that Morsi was not focused on governing and appointing the best people for jobs. He was focused on digging himself and his party into power, so, by the time of the next presidential elections, Egypt could have had the worst of all worlds: an invincible government and an insoluble economic and social disaster.

One incident is very revealing of the Brotherhood’s priorities. You could not make this up. The best way for Egypt to quickly earn foreign currency to buy food and fuel would be to revive tourism, which accounts for 10 percent of the economy. On June 16, Morsi appointed 17 new governors. In Luxor, the heart of Egypt’s tourism industry, he appointed Adel al-Khayyat, a member of the Islamist militant group Gamaa al-Islamiyya, which had claimed responsibility for the massacre of 58 tourists in Luxor in 1997 — precisely to destroy tourism and hurt Hosni Mubarak’s government. Gamaa abandoned violence about a decade ago, although it has never repudiated the 1997 attack. Morsi’s own minister of tourism resigned in protest at the appointment, and Khayyat eventually quit, too. But it gives you an idea of what was going on. It would be like Chicago appointing a crony of Al Capone to lead its tourism bureau.

Rather than punishing Egyptians for desperately trying to change course before they go over a cliff, America should use its aid and influence with the army to get the most out of this crisis. That starts by insisting that the Brotherhood leaders be released from jail and that the party and its media be free to contest the next parliamentary elections and have a voice in the constitution-writing process. Anyone who tries to govern Egypt alone will fail: Mubarak, the army, the Muslim Brothers, the liberals. Egypt is in a terrible deep hole, and the only way it can get out is with a national unity government that can make hard decisions and do the required heavy lifting.

Indeed, the big question for Egypt is not only who rules but how anyone can rule? Can a fragile new democracy make progress in the face of such deep economic dislocation and distress? I just returned from Egypt. It is falling apart. A few weeks ago, I sat in a teahouse in Cairo interviewing Mahmoud Medany, a researcher at Egypt’s Agricultural Research Center and one of the country’s top environmental experts. Medany, 55, recalled that some 40 years ago, when he was in middle school, “we used to sing this song about how the whole world is talking to the 20 million Egyptians.” When Mubarak took over in 1982, “we were 33 or 34 million. Today, we are over 80 million.” Also the steady compacting of soil in the Nile Delta, he added, combined with gradual sea level rise due to global warming, is leading to more and more saltwater intrusion into the Delta. “The Nile is the artery of life, and the Delta is our breadbasket,” said Medany, “and if you take that away there is no Egypt.”

This confluence of population, climate, unemployment, water scarcity and illiteracy may be making Egypt ungovernable — and the job of president impossible — with such a stressed and mobilized population. I hope not, but I do know this: Egypt can’t just keep oscillating from a secular/military regime that isolates the Brotherhood and a Brotherhood regime that isolates the other side.

The Wikipedia War Over Egypt's 'Coup'

Posted By Marya Hannun
July 7, 2013


In recent days, the protests and clashes over the Egyptian military's July 3 ouster of President Mohamed Morsy have transpired amid a parallel battle over semantics -- specifically whether the dramatic events of the past week constituted a "coup." Adopting the loaded word has very real implications for everything from the future of Egypt's fledgling democracy to the more than $1 billion in aid Washington sends to Cairo each year. And, as with past international crises, nowhere is the debate fiercer than in the dark netherworld of Wikipedia forums. The heated back-and-forth over the title for the English-language page "2013 Egyptian coup d'état" (at least that was the title at press time) is a case in point.

In arguing for a title change, some Wikipedians have asserted that it's hypocritical to call Egypt's first popular uprising in 2011 a "revolution" and second in 2013 a "coup," given that both required military intervention to realize popular demands for a change in political leadership. "To describe the events which allowed Morsi's rise to power as a 'revolution' but those which led to his downfall as a 'coup' is clearly biased and violates NPOV [Neutral point of view]," one user writes. "A number of the comments by those defending the use of 'coup' in the title and trying to shut down discussion frankly strike me as Wiki-lawyering."

Others have argued that it's biased not to call the overthrow of Morsy a coup: The "military removing the president and installing a new one (even if not military), suspending the constitution and seizing control over various state apparatus, e.g. state TV fits the normal definition of a coup, particularly since there doesn't seem to be anything in the constitution or other legal basis for these actions (to be clear I'm only referring to the legal aspect not the ethical or moral or whatever)," one Wikipedian points out. "It is called by the reliable media a coup d'état,deposing a president especially elected is a coup d'état ,and wikipedia only goes with neutral naming," another notes. "[P]ro-coup politicians always call it a revolution! But I think we should wait some days for the consensus of the medias, Google hits, etc. Then we decide. For the moment coup is the appropriate title," a third adds, a bit more cautiously. (The page also includes a robust discussion about whether major news outlets have been using "coup" without caveats or hedging by putting the word in quotes.)

Some have made more nuanced arguments. "The point is clearly debatable," concedes one user. "According to the strict definition given here this was a coup. However statements from the US and UK governments carefully avoided using the word 'Coup'. Given that US military aid would be at risk if a coup had taken place, coupled with the fact that both the US and UK have refrained from referring to it as a coup we can infer that the word 'coup' is politically very sensitive here and it may be best to avoid using it and use the term 'military intervention' instead as the word used in the US and UK government statements."

And still others have maintained that Egypt is a special case -- one where the standard definition of a coup doesn't apply. "I think it's more accurate to call the page 'Impeachment of Mohamed Morsi' instead of '2013 Egyptian coup d'état,'" one user suggests. "If CNN and BBC call it something, does this mean it has to be the right one? The guy abused his power as president of Egypt so he was replaced by the military with the head of the Constitutional Court as acting president with an early election to be scheduled soon."

Coup politics is self-destructive

Sunday, 07 July 2013

If nothing else, the recent turbulence in Egypt leading to the ouster of the elected President Mohamed Morsi should negate the facile view that all Muslims are temperamentally inclined towards radical Islamist solutions.

The sheer scale of the mass protests that finally propelled the military takeover on Wednesday demonstrates that the normal choppiness associated with emerging democracies — and our neighbours Pakistan and Bangladesh have had their fair share, as have Indonesia, Thailand and the Philippines — hasn’t left Egypt insulated.

How could it? What was significant about the Tahrir Square demonstrations that led to the ouster of the well-entrenched former President Hosni Mubarak was its reliance on mass mobilisation. Recall that it was precisely such a mass upsurge that led to the dethronement of the Shah of Iran in 1979-80. By contrast, regime changes in places such as Libya — and the ongoing conflict in Syria — were accompanied by a vicious civil war which creates its own complications. I am, of course, not including Afghanistan and Iraq where regime changes arose from foreign military interventions.

Yet, while it is parallel to detect parallels with the Iranian revolution that established a quasi-repressive, theocratic regime, would it be right to welcome the ouster of President Morsi and the crackdown on the Muslim Brotherhood as a pre-emptive strike to prevent Egypt going the Iran way. It is precisely such a logic that has prompted many western liberals to welcome the mass protests against the creeping Islamisation of society and politics in Turkey.

No doubt President Morsi, who was elected in a free and fair election a year ago, had a strong commitment to the creation of an Islamic society. He complemented this radical impulse with an inept management of the economy and outright cronyism that saw many disreputable Islamists being appointed to important posts. But incompetence and democracy often go hand in hand, as many Indians will readily admit. If economic bungling and cronyism are such unforgivable sins, it is scarcely possible that any elected regime will ever enjoy any measure of stability. Certainly, the quantum of mass protests against the elected governments in France, Greece and Brazil should make these countries candidates for change at gun point. 

In Egypt it was an alliance of starry-eyed liberals, Nasserite socialists, remnants of the Mubarak elite and hard-up urbanites who came together to demand the ouster of the Morsi regime. Of course they shared a common distaste for an intrusive Islamisation process which, in any case, was bad for tourism. Yet, this experience was not uncommon. In the early-1970s, it was a similar experience of competitive crowd power that created the conditions for the military coup which ousted the neo-Marxist Salvador Allende from power in Chile. People with longer memories will also recall the street protests that led to the ouster of Prime Minister Mohammad Mosaddegh in Iran. The archives now tell us that the coup in Chile was meticulously planned by the CIA in cooperation with US corporations. It is also known that British Intelligence played a major role in the removal of Mosaddegh (after he nationalised the oil wells) and the restoration of the Shah.

As yet, there is nothing to suggest that there was a ‘foreign hand’ in the removal of Morsi. True, approximately $1.35 of the $1.55 billion US aid that goes to Egypt is expended by the military — a possible price for maintaining the peace with Israel — but, as is evident from the reactions of the Obama Administration — Washington is trying to balance between its distaste of incipient Islamism and its enthusiasm for democracy.

This is a genuine dilemma that faces most people who have no love for the Muslim Brotherhood but are uncomfortable about the peremptory military intervention in Egypt. The awkwardness is compounded by the fact that Morsi has been arrested and may be put on trial on the ridiculous charge of “insulting the Presidency.” Moreover, the arrest of Mohammed Badie, the supreme leader of the Brotherhood, and the warrants for the arrest of 300 of its leading activists prompts the fear that the emerging democracy in Egypt could well be the flip side of the Islamic democracy that prevails in Iran. In Iran, for example, all the candidates for the post of President have to be vetted by a council of theologians; in Egypt’s emerging politics, the principle of “anyone but the Muslim Brotherhood” could end up prevailing.

Islamist March Hits a Roadblock

July 5, 2013 by Team SAISA (Edit)
Filed under Analysis

Ravi Shanker Kapoor

The turmoil in Egypt and Turkey is a big roadblock in the march of Salafist-Wahhabi ideology, the most obscurantist form of Islam that seeks to revive the faith in its sixth-seventh century purity. It is, however, too early to say that it is the end of political Islam, for globally Islamists have shown considerable tenacity in the past.

The march of Islamic fundamentalism has been continuing all over the world for many decades; and the march has been comprehensive, rather totalitarian, in scope. Islamists have influenced not only the politics and economy in the Muslim world but also society, culture, arts, cinema, literature—in short, all aspects of human existence. However, liberal elites across the globe did not treat the growth in Islamism as a threat; owing to sham concepts like multiculturalism and political correctness, such growth was viewed with benign neutrality. The rise of the fundamentalist Muhammad Morsi last year, and his recent fall, as Egyptian president should be seen against this backdrop. The protests against Turkish Prime Minister Erdogan and his bigoted Justice and Development Party (AKP) should also be viewed in this context.

The popular upsurge in Egypt and other Middle Eastern nations was called ‘Arab Spring,’ and the change of dictators like Hosni Mubarak was regarded as a new dawn in a region where authoritarian rule is the norm. What mainstream media and most commentators failed, or refused, to see was the danger associate with the simultaneous strengthening of the Muslim Brotherhood and other Islamist forces. The high priests of international media turned a blind eye to the fact that the Muslim Brotherhood had close links with Al Qaeda and that the Morsi regime would be little different from Taliban rule in Afghanistan. After all, the Muslim Brotherhood, Al Qaeda, the Taliban, and other fundamentalist groups derive their inspiration from the same Salafist-Wahhabi sources.

In fact, the arch liberal, US President Barack Obama, went out of his way to pave the path for Morsi and his Muslim Brotherhood. His Administration showed remarkable alacrity is dumping the long-standing ally, Mubarak, in the region. Former US Secretary of State Hillary Clinton had a meeting with Morsi. For a long time, Obama and his officials overlooked Morsi’s Islamist agenda and the brutal persecution of Coptic Christians by the Muslim Brotherhood.

Worse, US Ambassador to Egypt Anne Patterson brazenly sided with the hated Morsi regime. It was not only Morsi who recently urged Coptic Christian Pope Tawadros II to exhort his flock to keep away from the protests; there was a report that she also asked Tawadros II to do the same. Her shameless conduct evoked sharp reaction from the Copts. Coptic activist George Ishaq told Patterson to “shut up and mind your own business.” In his address to the Ambassador, Christian business tycoon Naguib Sawiris posted a message on his Twitter account, saying, “Bless us with your silence.”

It is not surprising that Patterson and her boss, Obama, have been castigated by protesters. There are posters at Tahrir Square loudly denouncing the duo as supporters of terrorism and Morsi. Yet, Obama was consistent in his support to Morsi till the very last. His reaction to Morsi’s ouster actually underlined his soft corner for the deposed dictator as well as the Muslim Brotherhood. He said, “We are deeply concerned by the decision of the Egyptian Armed Forces to remove President Morsi and suspend the Egyptian constitution. I now call on the Egyptian military to move quickly and responsibly to return full authority back to a democratically elected civilian government as soon as possible through an inclusive and transparent process, and to avoid any arbitrary arrests of President Morsi and his supporters. Given today’s developments, I have also directed the relevant departments and agencies to review the implications under US law for our assistance to the Government of Egypt.”

While the situation has unfolded quite fast in Egypt, protests in the other major Muslim nation, Turkey, have been the result of developments in over a decade. Unlike Morsi whose rule has been a disaster for his country, the Erdogan regime occasioned spectacular economic growth and development in Turkey. He became prime minister in 2003. Personal income has doubled since then. In 2002, inflation was 34.9 per cent; it fell to 5.7 per cent in 2011, the lowest in 39 years. The public debt as percentage of GDP came down from 74 per cent in 2002 to 39 per cent in 2009. There was impressive growth in education and infrastructure.

Erdogan’s Islamist agenda comes on the back of solid economic progress, but it is no less Islamist than what Morsi was trying. But Erdogan’s methods are unspectacular. Daniel Pipes, an America-based authority of Islam and president of the Middle East Forum, wrote a few months ago: Erdogan’s “AKP wins ever-greater electoral support by softly coercing the population to be more virtuous, traditional, pious, religious, conservative, and moral. Thus, it encourages fasting during Ramadan and female modesty and discourages alcohol consumption. It has attempted to criminalize adultery, indicted an anti-Islamist artist, increased the number of religious schools, added Islam to the public-school curriculum, and introduced questions about Islam to university entrance exams.”

As Egypt Roils, Israel Watches

BY OREN KESSLER | JULY 6, 2013

As the streets of Cairo erupt in chaos, Jerusalem wonders if the military can set things right again.

TEL AVIV — A year ago, Egyptians elected their first Islamist president. Across the Red Sea, Israelis were on edge.

"Israeli officials most dread the prospect of an Islamist president," I wrote in these pages in the lead-up to Mohamed Morsy's victory, when the Muslim Brotherhood candidate appeared to be a frontrunner.

A year later, now that Egypt's military has deposed the Islamist head of state, one might expect Israel to breathe easy. But like so much in this region, the two neighbors' relationship is exceedingly, unendingly complex.

"It's at once more complicated and much simpler than it seems," says Mark Heller, an Egypt expert at Tel Aviv's Institute for National Security Studies. "What's complicated is that there's no denying the deep hostility of every Islamist movement, including the Muslim Brotherhood, to Israel. But it's also true that the other political forces in Egypt, including those simplistically described as liberal or secular, are often no less hostile."

"What makes it simpler is that as long as the army has the dominant role in foreign and security policy, it doesn't matter so much who controls parliament or the president's office," he says.

Several months into Morsy's term, Israel Defense Forces (IDF) officials told me ties with their Egyptian military counterparts had never been better. Egypt's Army is the beneficiary of Washington's annual $1.6 billion aid package to the country -- money dependent on it playing nice with the Jewish state. Not that there's any love lost between the two, but at least there are shared interest. Egypt's generals have no desire for another costly war with their neighbor, with which they shares an interest in keeping Hamas gunmen ensconced in Gaza rather than terrorizing either country's soldiers or civilians.

And yet shortly after Morsy's presidency began, Israel saw signals that its anxiety over Islamist rule may have been justified. Just a few months in, video footage emerged from 2010 showing him perorating: "We must never forget, brothers, to nurse our children and our grandchildren on hatred for them: for Zionists, for Jews." Egyptian children "must feed on hatred.... The hatred must go on for God and as a form of worshiping him."

In another video he called Israelis "bloodsuckers", "warmongers" and "descendants of apes and pigs" -- all well-established anti-Semitic tropes, the last of which derives from the Quran and hadith and is a favorite of Islamists. Morsy countered that his words had been "taken out of context," but it soon was revealed that he had told a group of U.S. senators that American media is "controlled by certain forces" keen to discredit him. Even when trying to clear his own name, Morsy was unable to steer clear of anti-Semitic slurs.

And yet Israelis could not deny that this deeply flawed leader had kept the two countries' three-decade cold peace at a chill roughly similar to that of his pro-Western predecessor Hosni Mubarak. Morsy, it seemed, might not be the monumentally destabilizing force Israeli leaders had feared. It's true that under him, government-to-government contact was lacking to nonexistent -- dealings with the Israelis were almost entirely handled by the military and intelligence. And yet when conflict predictably erupted between Israel and Hamas in last year's eight-day Operation Pillar of Defense, Morsy's government played a useful rolemediating between the two sides, each of which refuses to talk to the other directly.

Indeed, a chief Israeli concern had long been that a Brotherhood-led government would be favorable to the Hamas statelet in the Gaza Strip. (Hamas is, after all, effectively the Brotherhood's Palestinian branch.) And yet Morsy's government, however, did nothing to stop the Egyptian army from destroying smuggling tunnels to Gaza -- in fact, with him in office, more tunnels were destroyed than Mubarak's men had ever dreamed of. This, for Israel, was a godsend -- the tunnels were conduits for consumer goods difficult for Gazans to obtain due to Israeli and Egyptian trade restrictions. Terrorists and their weapons also passed through in abundance.

Why Pentagon Must Embrace Transformation, This Time

By Robert D. Holzer on July 02, 2013

M80 Stiletto. Designed for swarming, riverine, littoral ops.

Military transformation boasts several fathers, including Andy Marshall (Yoda) of the Pentagon’s Office of Net Assessment, Andy Krepinevich of the Center for Strategic and Budgetary Assessments (a Marshall acolyte) and the late Vice Adm. Art Cebrowski of the Office of Force Transformation (OFT), but relatively few children. The OFT built the M80 Stiletto (pictured above) and some in the Pentagon believe the combination of UAVs, satellite targeting and data fusion cobbled together over the last decade comprise an accidental transformational capability. Rob Holzer, a former colleague of mine who went on to work for the one Pentagon office charged with pushing transformation forward in the face of a very unfriendly (or to be kind, cautious) military, argues it’s time for the US defense enterprise to finally and truly embrace transformation. The Editor. 

The U.S. military must quickly come to grips with the inescapable fact that fundamental changes to the entire defense structure are looming — just as similar changes loomed little more than a decade ago before the events of 9/11 upended the strategic landscape. These changes could be far more disruptive than the reforms initially planned during former-Defense Secretary Donald Rumsfeld’s tenure and may be even more critical to long-term U.S. national security interests than the “Accidental Transformation” brought about during the protracted and irregular warfare in Iraq and Afghanistan.

Facing the dire prospect of long-term budgetary austerity at home, while at the same time confronting strategic uncertainty and growing risks abroad, the U.S. military must embrace the process of fundamental change that was derailed by the decade of war. In a word, that process is called transformation.

While the concept of transformation became distorted so that it often simultaneously meant everything and nothing — and most damaging — was too closely associated with former-Defense Secretary Donald Rumsfeld’s tenure at the Pentagon — the fundamentals of the concept hold even more import for the U.S. military today.

Transformation’s previous application was stymied since its implementation took place in an ad hoc fashion in response to urgent issues arising from battlefields in Iraq and Afghanistan. This “Accidental Transformation” still achieved notable breakthroughs in terms of exponential use of unmanned systems; robots; greater reliance on human factors in irregular warfare, and development of integrated warfighting networks and expanded use of network analytics to gain insights into terrorist organizations. Today however, transformation writ-large is a strategic imperative that the department ignores at its own peril.

At its core, transformation is about instilling a process of continual change in the U.S. military. It is about creating “maneuver space” so that dramatically new ideas and concepts can be prototyped and experimented with by the operational forces. This is not modernization or selected enhancements to existing programs. It is not about “things” so much as identifying a set of “big ideas” that will in turn yield leap-ahead technologies and capabilities. These ideas will then inject significant changes in current military organizational culture and doctrine. It is also about empowering junior officers to challenge the status quo and enabling them to pursue new ideas and concepts. That is where the true value of transformation as a strategy can take root.

Transformation is not about definitions, doctrine or master plans. It is not about compiling lists of programs to axe, although undeniably some weapon systems will have to go in order to free-up funding to invest in what capabilities come next. There is no magical end point that yields a transformed military. Instead the entire defense establishment must adopt a transformation strategy so it can fundamentally re-think and re-position itself to confront a host of adversaries adapting and innovating at rates much faster and much more dynamically than our institutions have grown accustomed to understanding.

Marginal change in defense will no longer suffice given the giant laundry list of strategic challenges facing the Defense Department in coming years. Glancing at a cursory list of global issues looming just over the horizon reveal the stark magnitude of the range of festering problems with which the U.S. military must deal. These extend from coping with rapidly rising powers like China, India and Brazil, to feeling its way through the aftershocks of the Arab Spring (including today’s widening proxy war in Syria), to responding to more frequent natural disasters and population migrations. Intertwined across all of these international issues are the twin problems of increasingly sophisticated military capabilities (ballistic missiles, precision munitions, cyber, WMD?) in the hands of more second tier states and non-state actors. In short, while state-on-state conflict may be in decline, mayhem across the globe is poised to explode.

The current Strategic Choices and Management Review (SCMR) directed by Defense Secretary Chuck Hagel and the upcoming congressionally-mandated Quadrennial Defense Review provide robust, near-term opportunities to begin implementing transformational change across the entire defense establishment. Transformation and not marginal changes will produce the agile, flexible, lean and technologically advanced force that defense leaders continue to call for. If as Secretary Hagel says “everything is on the table,” then the development of a comprehensive Transformation agenda calling for significant change and restructuring should be the output of these strategic reviews.

The likely imposition of another $1 trillion in cuts to Pentagon spending over the next decade, via sequestration, only bolsters the immediate need to dramatically transform defense. Now is the time to rethink defense for the 21st Century and shed the leaden vestiges of Industrial Age military organization, process and procurement.

If we are truly facing a historic fiscal correction, one that leaders like JCS Chairman Gen. Martin Dempsey say will last for five to seven years — or even longer — then only a bold strategy of transformation will yield the degree of change required to meet this unsettling future. Dempsey has urgently called for undertaking “unpopular but unavoidable institutional reforms” that include shedding excess equipment and bases, reforming how weapons and services are procured and reducing redundancy across the military services. That sounds a lot like the same strategic objectives that transformation advocates strove to implement back in 2000-2001.

Leaders must heed, or face the music

Sunday, 07 July 2013

In the course of an essay which he wrote recently, veteran CIA analyst and visiting professor in an American university, Paul R Pillar, wonders about the massive street protests in Turkey and Brazil: “Why should there be such protests at all? The Governments being protested against were freely and democratically elected.

With the ballot box available, why should there be recourse to the street?” He goes on to offer explanations, and while the context in which he does so relates to the two countries he picked up as examples, his line of thought is valid for other democratic countries as well, including India, that have seen similar outrages by common citizens, albeit on a far smaller scale.

Pillar observes, “Even democratically elected leaders may come to have an inflated sense of knowing better than the citizenry what is in the citizen's own best interest.” It's precisely this ‘inflated sense of knowing’ that has gripped the Congress-led UPA Government and had led to the common man's uprising under the leadership of Anna Hazare. Hundreds of thousands of people in Delhi and elsewhere in the country rallied on his call for the establishment of an independent anti-graft institution, the Lokpal. The mass movement eventually fizzled out, but it had served the purpose. The Government and the parliamentarians were compelled to retrieve from the back-burner —where it had rested for decades — a proposal for the institution of a Lokpal. Now we at least have a Bill that Parliament will consider and need to pass at the earliest. Elected leaders who ridicule the ‘failure' of the Hazare movement refuse to realise that the Lokpal issue was brought to life by the social activist and the street protests he led. The ‘we know best because we are the elected representatives' argument is what the leaders had employed to delay the decision.

A similar farce has been enacted by the Government with regard to tackling money that Indians have stashed away illegally in tax havens abroad. For years it has dragged its feet on the issue of getting black money back and deploying it for purposeful means in the country. Then Baba Ramdev launched his public campaign on the issue which drew many thousands of people on the streets in Delhi. The Government dismissed the protests as politically motivated (so what?), cracked down on the protesters in the middle of the night —caning them mercilessly. Predictably, the Government claimed it knew better how to handle the matter of black money and that a bunch of hooligans on the roads could not dictate its strategy. The problem is: The UPA regime has no strategy to get the black money back to the country, even as the economy faces a funds crunch.

None of these two public protests brought the Government down. But that does not take away from the important role they have played in shaping public perception and channeling the anger and desperation the citizenry feels about a regime which simply has turned insensitive to its aspirations and demands. The cumulative impact could be seen in the coming elections. Remember, Jayaprakash Narayan’s people's revolution led to Indira Gandhi’s ouster in the general election held after the Emergency was lifted.

This brings us to another observation that Pillar makes: “Even democratically elected leaders may have a bias in favour of what is flashy or prestigious or symbolic rather than what affects most people's daily lives.” What's affecting people's lives in India are rising prices of essential commodities, the slowdown in employment and booming corruption. But the democratically elected Government and its leaders are concerned with retaining the red beacon on their vehicles (as a form of prestige), a large retinue of personal security staff (it's a flashy way to strut about), and thrusting wasteful social welfare schemes such as the Mahatma Gandhi National Rural Employment Guarantee Scheme and the Right to Food legislation (symbolic, vote-gathering mechanisms). Senior advocate Harish Salve has been contesting in the court the right of VIPs to have the red beacon. Others have questioned the sagacity of having social welfare schemes that simply cannot be effectively implemented because they have been ill-thought out and do not have infrastructural support.